I have been looking at the post by Victoria Ferauge in Americans in France and am as appalled as she is at the way the US Government is seeking to extend its sphere of influence over foreign governments by requiring them to report on bank accounts and investments, pensions etc. held by US citizens outside the US, in order to try and stop tax avoidance by US citizens living abroad.
In most cases, as in France, this will actually breach the confidentiality agreement signed when accounts were set up, or it will be almost impossible to distinguish between US account holders, eg pensions, and cost the financial institutions a huge amount of money to impliment.
The cost of complying with Sarbanes-Oxley was bad enough, but this is yet another instance of the US government saying "Hey, you will do what we say"!
The way that the inequal extradition laws work in the favour of the US is another good reason to make a stand against this latest intrusion by the US into the legal rights of other foreign governments and their financial istitutions.
The replies by the European bankers et al.make very interesting reading !
Yes Catherine, it seems that the IRS want to be told of all transactions even if your business does not have any dealings with the US, you may be helping US citizens avoid tax. The dual-tax treaty between France and the UK seems positively benign compared to the draconian requests coming from the US IRS.
More power to your elbow for you for telling your bank where to go!
All they want is to prevent US citizens living abroad from avoiding the tax they are obliged to pay to the US on their world-wide earnings, even though they have already paid tax in the country where the money was earned or a gain made.
There seems to be no account taken of how much this will cost the banks, financial institutions or businesses in these difficult times and seeing that the last financial crisis was caused by the US mortgage scandal, I was very pleased to see the IRS being told by the European bankers in a very polite way that their requests were untenable. Before anyone says that this does not affect them, it may well do, as your pension provider would be most likely to have to comply at a huge cost to themselves, or maybe us!
Also if you have ex-pat Americans in your gite, they may be using undeclared income to pay for their holiday and that means that the IRS would want their details from you.
We were asked by our bank to sign something that allowed them to provide info to the US authorities. As we have never lived or worked in the US and are British citizens, I told them to get lost. They tried to tell me I 'had' to sign or my account would be closed. I told them to get lost again. A few weeks or arguments ensued but they eventually backed down.